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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
NOTICE OF MOTION NO. 707 OF 2010
IN
SUIT (LODGING) NO. 229 OF 2010
M/s. Jasmina Constructions Pvt. Ltd. ...Plaintiffs.
Vs.
Mandapeshwar Kripa Co-operative
Housing Society Limited & Ors. ...Defendants.
Mr. Rajiv Narula with Mr. Basant Trilokani i/by M/s. Jhangiani Narula &
Associates for the Plaintiffs.
Mr. S.U. Kamdar, Sr. Counsel with Mr. Vinay Deshpande with Ms.
Meenakshi Mhapeukar i/by M/s. Shamim & Co. for Defendant No. 1.
Mr. Ajay M. Talreja for Defendant No. 8.
Mr. Deepak S. Jadhav for Defendant Nos. 2, 3, 4 & 6.
CORAM :- ANOOP V. MOHTA, J.
DATED :- 5TH MARCH, 2010.
P.C.-
1 Leave granted.
2 The Plaintiffs, who are Builders and Developers, claiming binding
and enforceable rights against the Defendants, in view of a Development
Agreement dated 3rd January, 2009 and a Supplementary Agreement dated
4th January, 2009 and also praying for specific performance of the same
against Defendant No.1 Society and all necessary orders to complete the
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construction and to perform their obligation even against Defendant Nos.
2,3, 4, 6 and 8, for the reliefs of injunction and also for appointment of
Receiver to take possession of the flats from them for the agreed
development.
3 Defendant No.1 is a Co-operative Housing Society, registered under
the provisions of Maharashtra Co-operative Societies Act, 1960 (for short,
“the Act”). The Society is the owner of the land situated at Village
Mandapeshwar, Tq. Borivali, bearing Survey No. 23, 23-A, admeasuring
5960.46 sq. mtrs. On the said land there exists A-type and B-type buildings
having 5 wings consisting of total 84 flats, which were in use, occupation
and possession of the members of the Society comprising of 84 members,
out of which some of the Defendants are now objecting for redevelopment.
As all the members in the General Body Meeting have unanimously
resolved to redevelop the dilapidated buildings/ flats by demolishing the
same and by utilizing the F.S.I. and by loading of Transferable Development
Rights (T.D.R.) by constructing the new buildings for the members of the
Society. This resolution of 20/05/2007 was objected by only one person at
the relevant time.
4 Based upon the same, the Society invited tenders for the proposed
demolition of the existing buildings and the development, on 14/02/2008.
The Plaintiffs got the technical commercial bid from the Society on
05/03/2008. After considering the proposals/ offers given by the Plaintiffs
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on 01/05/2008, the members of the General Body of Defendant No.1
Society, unanimously resolved appointment of Plaintiffs and thereby, also
authorized executive committee to execute the redevelopment agreement
with the Plaintiffs. Accordingly, the Society issued Letter of Indent to the
Plaintiffs on 11/05/2008. The Society also addressed a letter on
29/08/2008, to the Assistant Commissioner, Borivali describing the
deteriorating condition of the building. Apart from other members,
Defendant Nos. 2 to 7 have also executed irrevocable consent terms on
09/10/2008.
5 Some time in January, 2009, the Final Development Agreement was
executed between the Plaintiffs and the Society and also executed deeds of
confirmation-cum-declaration. It has been duly registered. Defendant Nos.
4,5 and 6 by letter dated 23/04/2009 informed to the Society their
willingness to surrender their respective rights in the flat, if the Plaintiffs
pays the current market price and a lump sum amounts for the settlement
of the objection/dispute. The Plaintiffs by letter dated 28/10/2009, pointed
out to Defendant No.1 Society the demand of lump sum consideration of
Defendant Nos. 2 to 6 of Rs.25,00,000/- (Rupees twenty five lacs only).
6 Defendant Nos. 2 to 6, on 09/11/2009, as demand could not be
fulfilled, filed the dispute before the Co-operative Court against the Society
and the Plaintiffs and thereby challenged to the Development Agreement
and further that the meeting so held and the resolution/ decision so taken
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are not binding upon them. There was no application for interim relief as
taken out by the Defendants immediately.
7 The Deputy Registrar, Co-operative Societies, Mumbai by letter dated
31/12/2009, observed that the work of development was in accordance
with the procedure prescribed and there is no irregularity.
8 On 04/01/2009, a supplementary agreement executed between the
Society and the Plaintiffs regarding the further terms and conditions
pursuance to the basic development agreement. The Plaintiffs got the plan
approved in July, 2009 and subsequently amended the plans on
01/01/2010.
9 The Plaintiffs and Society have executed a deed of Rectification on
05/08/2009.
10 In all 77, out of 84 members of the Society have vacated their
respective premises for the redevelopment. The Plaintiffs have already
entered upon the property and demolished the two wings comprising of the
members who have vacated their respective flats. The work is in progress.
Defendant Nos. 5 and 7 have settled the matter on 15/02/2010 and agreed
to vacate their respective flats.
11 There is no dispute that the Plaintiffs have incurred and invested
huge amount approximately Rs. 8.5 Crores till the date, for the purpose of
purchasing T.D.R., security deposit, bank guarantee and by depositing
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cheques towards the rent, brokerage, transportation charges etc. of 77
members.
12 The Plaintiffs, pursuance to the basic requirements of the consent
terms of all the members at the relevant time, and the unanimous
resolution in their favour and duly signed and registered documents,
proceeded and acted in full swing without any obstruction and objection of
anybody except Defendant Nos. 2, 3, 4, 6 and 8.
13 The Plaintiffs have acted upon the Agreement clauses in the
following ways:-
“(a) The Plaintiffs procured licenses from the State Archeology
Department, which were required for the reconstruction
of the buildings within 45 days which was a condition
precedent in appointing Plaintiffs as developers;
(b) The Plaintiffs obtained NOC from the Public Housing
Department and removed the reservation, which was
required;
(c) The Plaintiffs has paid scrutiny fees for deduction of TDR;
(d) The Plaintiffs has obtained CFO concession;
(e) The Plaintiffs applied for and obtained copies of the PR
Card, DP remarks, conveyance in favour of the Society,
copies of the original building plans, etc.;
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(f) The building plans were prepared and submitted to the
Defendant No.1 Society for its approval; Defendant No.1
Society has approved the building plans submitted by the
Plaintiffs and the Municipal Corporation of Greater
Mumbai has sanctioned the building plans; the Plaintiffs
has obtained the IOD;
(g) The Plaintiffs has appointed Architects for the
redevelopment project;
(h)
The Plaintiffs has paid a sum of Rs.11,00,000/- to
Defendant No.1 Society towards corpus fund, a sum of
Rs.2,64,00,000/- to members of Defendant No.1 Society
and a sum of Rs.25,00,000/- towards security deposit;
(i) Out of Rs.5,60,00,000/-, a sum of Rs.2,64,00,000/- has
been distributed amongst 75 members who have vacated
their respective flats and handed over possession of the
same to the Plaintiffs;
(j) The Plaintiffs has commenced demolition of 2 out of the 5
buildings belonging to the Society, which are to be
reconstructed;
(k) The Plaintiffs has purchased total TDR required for the
entire project from the open market, obtained
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Nms707.10 7development rights certificate and has loaded TDR of
1,350 square meters required for the Defendant No.1;
(l) The Plaintiffs has paid transportation/ shifting charges to
members who have vacated their respective flats;
(m) The Plaintiffs has paid to each of the members who have
vacated their respective flats, monthly compensation for
11 months to enable them to secure temporary alternate
accommodation and balance postdated cheques
aggregating to 1,47,51,000/-;
(n) Defendant No.1 has given possession and Plaintiffs has
entered upon the property and started demolition;
(o) The Plaintiffs has paid 2 months brokerage charges to the
members who have vacated their respective flats for the
purpose of acquiring temporary alternate
accommodation.
14 A Division Bench of this Court in Saraswat Co-operative Bank Ltd.
Mumbai, Vs. Chandrakant Maganlal Shah & Ors.,2002 (Supp.)
Bom.C.R.539= 2001 (1) Mh.L.J. 581, has observed that if a case is made
out, the Court can appoint Court Receiver under Order 40 of the Civil
Procedure Code (for short, CPC) or pass the order of attachment before
judgment as envisaged under Order 38 of the CPC or such other
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interlocutory stage, itself.
15 The Apex Court in Rajendran & Ors. Vs. Shankar Sundaram &
Ors. 2008 (2) S.C.C. 724, has observed that prima facie opinion at the
interlocutory stage is sufficient to pass an order, under Order 38 of the
CPC.
16 In similarly situated matter, though the proceedings were not under
Arbitration Act, I have passed the order and appointed the Receiver with a
view to complete the project by taking possession for the time being from
the tenants with further directions to provide them all facilities as agreed
by the Developer. That was also a case of temporary dispossession to
complete the project. A Division Bench of this Court in Appeal No. 338 of
th
2009 in Arbitration Petition (L) No. 493 of 2009, dated 10 December,
2009, Girish Mulchand Mehta Vs. Mahesh S. Mehta, arising out of the
same order, has clarified as under, dealing with the similar aspects of power
of Court to pass appropriate order or direction in a situation where a
nominal members are objecting / obstructing to complete the project.
“16. In the present case, it is not in dispute that the General
Body of the Society which is supreme, has taken a conscious
decision to redevelop the suit building. The General Body of the
Society has also resolved to appoint the Respondent No.1 as the
Developer. Those decisions have not been challenged at all. The
Appellants who were members of the Society at the relevant
time, are bound by the said decisions. The Appellants in the
dispute filed before the Cooperative Court have only challenged
the Resolution dated 27/4/2008, which challenge would merely
revolve around the terms and conditions of the Development
Agreement. As a matter of fact, the General Body of the Society::: Downloaded on – 09/06/2013 15:40:40 :::
Nms707.10 9has approved the terms and conditions of the Development
Agreement by overwhelming majority. Merely because the
terms and conditions of the Development Agreement are notacceptable to the Appellants, who are in minuscule minority
(only two out of twelve members), cannot be the basis not toabide by the decision of the overwhelming majority of the
General body of the Society. By now it is well established
position that once a person becomes a member of the
Cooperative Society, he looses his individuality with the Societyand he has no independent rights except those given to him by
the statute and Bye-laws. The member has to speak through the
Society or rather the Society alone can act and speaks for him
qua the rights and duties of the Society as a body (See Daman
Singh & Ors. V/s. State of Punjab reported in AIR 1985 SC
973). This view has been followed in the subsequent decision of
the Apex Court in the case of State of U.P. V/s. ChheokiEmployees Cooperative Society Ltd. reported in AIR 1997
SC 1413. In this decision the Apex Court further observed that
the member of Society has no independent right qua the Societyand it is the Society that is entitled to represent as the corporate
aggregate. The Court also observed that the stream cannot rise
higher than the source. Suffice it to observe that so long as the
Resolutions passed by the General Body of the Respondent No.2Society are in force and not overturned by a forum of competent
jurisdiction, the said decisions would bind the Appellants. Theycannot take a stand alone position but are bound by the
majority decision of the General Body. Notably, the Appellants
have not challenged the Resolutions passed by the General Body
of the Society to redevelop the property and more so, to appointthe Respondent No.1 as the Developer to give him all the
redevelopment rights. The property rights of the Appellants
herein in the portion (in respective flats) of the property of the
Society cannot defeat the rights accrued to the Developer and/or
absolve the Society of its obligations in relation to the subjectmatter of the Arbitration Agreement.”
“18. We have no hesitation in taking the view that since the
Appellants were members of the Society and were allotted flats
in question in that capacity at the relevant time are bound by
the decision of the General Body of the Society, as long as the
decision of the General Body is in force. As observed earlier, the
Appellants have not challenged the decisions of the General
Body of the Society which is supreme, in so far as redevelopment::: Downloaded on – 09/06/2013 15:40:40 :::
Nms707.10 10of the property in question or of appointment of the Respondent
No.1 conferring on him the development rights.”
17 The contesting Defendants/Members unable to make statement
and/or not ready to provide security in case the suit is dismissed but the
project is halted at this stage, at their instance. Therefore, in view of above
facts, as well as, law so referred, the Court is empowered to pass
appropriate order, even at the interlocutory stage including to appoint the
Receiver under Order 38 and Order 40 of the CPC.
18
The learned counsel appearing for the Defendants has strongly relied
upon the Judgment of Single Bench of this Court in Notice of Motion No.
th
2090 of 2009 in Suit No. 1404 of 2009, dated 5 December, 2009 M/s.
Acknur Constructions Pvt. Ltd. Vs. Sweety Rajendra Agarwal & Ors.. In
that case the suit was filed by the Builder-Developer against the Co-
operative Society/occupants/members. That was not the case of 100%
consent given by the occupants at the relevant time. That was also not the
case where the person like the Defendants-Members raised dispute before
the Co-operative Court after such long time. In that case, there was serious
dispute about the title of the land itself, and therefore, observed that the
existence of Co-operative Housing Society itself was in doubtful. In the
present case, there is no such dispute and/or objection of title or ownership
of the society, as well as, the concerned majority members. In the present
case, based upon the majority members, the consent terms, as well as, the
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resolution, the parties have already acted upon and proceeded further in
view of the valid permission and sanction and registered documents as
referred above. Therefore, the facts and circumstances of the case, so cited
are totally distinct and distinguishable, and specially for the reason of
above Judgments and provisions of law as explained and elaborated in
various Judgments including of the Supreme Court, as referred above.
19 It is relevant to note that the Division Bench Judgment in Appeal No.
338 of 2009, Girish Mulchand Mehta, (Supra) which is final and binding,
was not cited before the learned Single Judge in Notice of Motion No.348
of 2009 in Suit No.126 of 2009, dated 08/01/2010, M/s. Jaydeep
Constructions Vs. Pant Nagar Rail View Co-operative Housing Society
Ltd. Therefore, also the said Judgment is of no assistance for the contesting
Defendants- members.
20 It is relevant to note that the Division Bench Judgment Girish
Mulchand Mehta, (Supra) is of dated 10th December, 2009, confirming the
earlier order as referred above. Now, that judgment, as well as, the
reasoning given has attained finality. This judgment, in my view, holds the
field on the subject. The judgment relied upon by the contesting
Defendants in the matter of M/s. Acknur Constructions Pvt. Ltd. (Supra)
is of dated 5th December, 2009. Therefore, there was no occasion for the
Learned Judge to deal and/or even to consider the judgment passed by the
Division Bench, as referred and quoted above. It is a relevant factor which
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goes in favour of the Plaintiffs.
21 As noted, it is relevant to consider all the necessary elements as
contemplated under Order 38, 39 and 40 of the CPC, while granting
and/or passing any order in such situation. As noted above, if the case is
made out and in a given facts and circumstances, the Court is empowered
to pass such ad-interim and/or interlocutory order including mandatory
order and/or even the Court can appoint the Receiver as already observed
in the Girish Mehta (supra) by the Division Bench of this Court. As noted,
even the Supreme Court in Rajendran & Ors. (supra), while dealing with
the aspect of Order 38 of the CPC, further clarified that if a case is made
out, the Court is empowered to pass such order even at ad-interim stage. In
the present case, all these elements are available for passing the order,
including appointment of Receiver as prayed.
22 It is relevant to note that the following observations of the Supreme
Court in such situation, which in my view also applies to the present facts
and circumstances of the case. (Deoraj Vs. State of Maharashtra & Ors.
(2004) 4 S.C.C. 697):-
“11. The courts and tribunals seized of the proceedings within
their jurisdiction take a reasonable time in disposing of the
same. This is on account of fair-procedure requirement which
involves delay intervening between the previous and the next
procedural steps leading towards preparation of case for
hearing. Then, the courts are also overburdened and their
hands are full. As the conclusion of hearing on merits is likely
to take some time, the parties press for interim relief being
granted in the interregnum.”
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“12. Situations emerge where the granting of an interim relief
would tantamount to granting the final relief itself. And thenthere may be converse cases where withholding of an interim
relief would tantamount to dismissal of the main petition itself;
for, by the time the main matter comes up for hearing there
would be nothing left to be allowed as relief to the Petitioner
though all the findings may be in his favour. In such cases the
availability of a very strong prima facie case – of a standardmuch higher than just prima facie case, the considerations of
balance of convenience and irreparable injury forcefully tilting
the balance of the case totally in favour of the applicant may
persuade the court to grant an interim relief though it amountsto granting the final relief itself. Of course, such would be rare
and exceptional cases. The court would grant such an interimrelief only if satisfied that withholding of it would prick the
conscience of the court and do violence to the sense of justice,
resulting in injustice being perpetuated throughout the hearing,and at the end the court would not be able to vindicate the
cause of justice. Obviously such would be rare cases
accompanied by compelling circumstances, where the injury
complained of is immediate and pressing and would cause
extreme hardship. The conduct of the parties shall also have tobe seen and the court may put the parties on such terms as may
be prudent.”
23 The above observations are relied in Zenit Mataplast Private
Limited Vs. State of Maharashtra & Ors., (2009) 10 S.C.C., 388.
Paragraph No. 34 reads thus:-
“34. This Court in Manohar Lal Chopra V. Rai Bahadur
Rao Raja Seth Hiralal, AIR 1962, S.C. 527, held that the
civil court has a power to grant interim injunction in exercise of
its inherent jurisdiction even if the case does not fall within the
ambit of provisions of Order 39, Code of Civil Procedure.”
24 As noted, there are correspondences (dated 23rd April, 2009 and 19th
September 2009) on record to show that the contesting Defendants in fact
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submitted their proposal to settle the matter. However, that was on some
consideration/lump sum amount. The conduct is averred in the affidavit
and not in dispute. This means, the intention was something else rather
than challenging the action as agitated by filing the dispute before the Co-
operative Court after such long time and in spite of the fact that initially
there was no objection for such project to be continued. The resolution of
the society read with the necessary compliances made at the relevant time,
apart from the vacation of the premises by other consenting members and
the action taken by all the parties as referred in paragraph 14 itself, in my
view, an additional factor, goes against such Defendants.
25 Admittedly, the Plaintiffs, as well as, Society No.1 and all the
consenting members are supporting in all respect. The averments made in
the suit, as well as, in notice of motion, objection so raised by filing dispute
on the allegations of fraud, misrepresentation, now at this stage, is again a
matter of trial and details. Those aspects, just cannot be gone into at this
stage in such fashion, merely on the basis of the averments so raised as
noted, the conduct of the parties, therefore, also place important role while
assessing the necessary elements as contemplated under the CPC before
passing any such order.
26 There is no dispute with regard to the stages/steps taken by the
parties read with the investment already made and the fact that the
everybody is waiting for the project to complete within a stipulated time
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and, as early as possible, so that the members can take and re-occupy the
newly premises and/or they can occupy, as early as possible, with all the
facilities.
27 The basic consents and the unanimous resolution as passed and duly
registered documents as executed, now just cannot be restored back at the
instance of such 4 or 5 Defendants/members. It is not the case that they
will be deprived of their rights and the possession permanently. The whole
object and purpose of this project is always to get the new premises on the
same plot subject to the terms and conditions. Once the premises/ project
is completed, all the members will re-occupy the same with the facilities.
Therefore, this temporary dispossession to complete the project, in my
view, cannot be treated as permanent dispossession as sought to be
contended and basically on the ground of fraud and misrepresentation as
alleged.
28 Even if, some allegations are taken note of, still that itself cannot be
the reason to halt the project in such fashion, specially when majority of
the members and the society till today and even otherwise willing to
proceed and continue with the project as already agreed. Therefore, merely
disputes have been raised by the some of the Defendants and the same is
pending, that itself in the present facts and circumstances, cannot be the
reason to overlook the basic purpose and object of the project to complete.
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29 The Plaintiffs has filed this suit based upon the agreed and
unanimous resolution and registered documents and specially when both
the parties proceeded and acted accordingly since so many months. The
agreement itself shows that it is not a simple agreement of development.
The Plaintiffs has right in the property also, in view of the agreement itself,
subject to the conditions so agreed. (Chheda Housing Development
Corporation Vs. Bibijan Shaikh Farid & Ors. 2007 (3), Mh.L.J. 403)
Such right, just cannot be overlooked at the instance of 5 contesting
Defendants. In my view, the Plaintiffs has a right, and basically when it is
supported by the Society, as well as, the majority of the members, to file
such suit and for such reliefs, as claimed in notice of motion. The challenge
to the right and/or entitlement of the Plaintiffs to file such suit and/or to
take for such motion for the above reason is unsustainable. There is a legal
right to file such suit for appropriate reliefs, so claimed. The suit cannot be
dismissed and ad-interim relief just cannot be refused, merely because of
objections by 5 members by filing the dispute in the Co-operative Court
and raising issue, even of the jurisdiction of this Court, pending the dispute
before the co-operative Court.
30 Therefore, considering the above judgments including the Supreme
Court, to pass appropriate order even at interlocutory stage, if the case is
made out and in the situation like this, where whole object and purpose to
complete the project within the prescribed period specially when majority
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of the members have consented and already vacated the premises and the
Plaintiffs have already invested huge amount as recorded above, and
provided all necessary alternate accommodation and the facilities and as
this dispossession is only for the temporary period till the construction
and/or completion of the project, therefore, it is just and convenient and it
is in the interest of justice and as this Court is empowered to pass such
order and the balance of convenience and equity also lies in favour of the
Plaintiffs. Therefore following order.
31
Resultantly, ad-interim relief in terms of prayer clauses (a) except
Flat No. A-1/13 and A-2/31, and (b) except Defendant Nos. 5 and 7, as
Defendant Nos. 5 and 7 have settled the matter.
32 However, it is made clear that 8 weeks time is granted to vacate the
premises voluntarily, to these 5 contesting Defendants. No coercive steps
should be taken by the Plaintiffs and/or the receiver till this date.
33 It is also made clear that the Plaintiffs and the Society, subject to
agreement, will provide all the facilities including payment of rent/
occupation charges as given and provided to the other members. If these
members vacates the premises voluntarily, the Plaintiffs to provide/ pay
them the necessary amount as agreed. If they do not, then Receiver to take
steps in accordance with law and the Plaintiffs to deposit the requisite
amount with the Court Receiver towards the compensation/occupation
charges.
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34 It is made clear that the Plaintiffs will pay the amount regularly and
provide all the facilities as agreed, till the permanent alternate
accommodation is handed over to these Defendants in the new building, in
question, as agreed.
35 The Notice of Motion is allowed in above terms. No costs.
(ANOOP V. MOHTA, J.)
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